I believe he is right and wrong. I see potential huge collapses in the future due to [1] and many people who don't believe in CryptoCurrencies and only invest for their portfolios will see huge loses. I can imagine some crashes taking years to recover.<p>However in the long term I see CryptoCurrency as the future and a viable store of value. I think Buffett is right to warn investors not to invest. Only invest if you understand and believe in these technologies.<p>I sort of cringe with family and friends getting too deep into it because of the historic rate of return.<p>I'm the sort of person that will hold their coins even if we go to $0.<p>[1] - A major Government feeling threatened in several years due to a handful of CryptoCurrencies really screwing them over. (See Zerocoin for tax haven, Bitcoin for smashing into value of USD, Ethereum for immortal web servers) declaring that all these currencies and the systems running on top of them (file sharing servers, child porn, unbreakable messaging, etc..) are now illegal.<p>I think the only reason they will prevail is that the countries that continue to embrace these technologies will benefit from them and become stronger. Eventually the countries that banned them may have to unban them to remain relevant.
I think Buffett is attacking a straw man here. I don't think anybody is really arguing that BTC itself, as it exists as the balances of addresses on the blockchain, has intrinsic value. Just like fiat currency it has none. The <i>payment</i> technology, and the applications it enables, <i>do</i> have intrinsic value, however. He admits as much in this interview. He seems to recognize the distinction between a payment network and the currency itself.<p>That means as a first mover in this space, however, that BTC is likely to go up in value with adoption, and probably reach a peak and will either remain a widely used currency or be supplanted by a currency with more attractive monetary policy. That's what a lot of early adopters of BTC are speculating.<p>If there was a way for a casual investor to invest in the cryptocurrency space without investing in specifically BTC, I absolutely would sell my BTC and buy into it But to date there aren't any publically traded BTC companies, AFAIK (Please correct me if I'm wrong.)
This is a case of a famous, high status person making a statement without credible arguments. In other words, if a non-famous person said this, nobody would take him seriously (or noteworthy), because he doesn't really contribute anything to the discussion about bitcoin. The internet is full of good comments about bitcoin (for and against), but more visibility is given to Buffet's comments because of his status.<p>I guess media is to be blamed here to some degree. If someone is famous, then the media will make a story about anything that increases ad revenue. And also users of social media like Hacker News.
> <i>“the idea that it [bitcoin] has intrinsic value is a joke.”</i><p>I would love to hear Warren Buffet on the "intrinsic value" of gold.<p>Edit: With the comment of thatthatis in mind, WB uses "intrinsic value" as future income potential. That use then makes me wonder about his "intrinsic value" of dollars, euros and yen.
The problem with it being an effective way to exchange money but not a meaningful store of value is that the former depends upon the latter. I'm curious as to whether there are any altcoins that solve this problem by, say, pinning the value to USD (or a basket of currencies) and allowing for a continually increasing monetary supply.
He's right. It has no intrinsic value, is controlled by too few people, and has no guarantors to assure its value.<p>Not to mention hacking, the Mt Gox debacle, etc...<p>Real currency is more convenient, and real commodities have intrinsic value.
I wonder if ordinary people would even consider holding any digital currency even if the value of it is superstable.<p>Even if there would be an altcoin that achieves stability there would be huge adoption hurdles.
Buffet is most definitely not a person who could simply miss the point of Bitcoin. I'm sure he understands it. Therefore, his statement must have an agenda. Maybe it's a non-obvious agenda, because he's not known to be involved in anything that Bitcoin may directly influence and hurt. But there must be a reason why he says something he most likely doesn't believe himself.